OPEC and non-OPEC countries are looking to convene and decide the extension of their oil output cuts, which will help strengthen oil prices that have been climbing steadily since their April lows. Major oil powers Saudi Arabia and Russia are reportedly supporting a one-month extension of the current level of output cuts.
Oil prices have shown a sustained recovery over the last few weeks, after the industry saw WTI oil futures crash below zero, and Brent crude futures nearly touch their 20-year low. Global oil demand has picked up as China’s oil demand rebounded, with its demand expected to have reached 92% of its pre-COVID levels in May.
Did you know?
The air cargo volumes recorded by the top 25 airfreight players in the world saw demand declining by 7.8% year-on-year to 15.4 million metric tonnes. The top air freight forwarder, DHL Global Forwarding, saw its volumes decline by 4.6% year-on-year to just over 2 million metric tonnes.
“All indications are that we’re starting to bottom out and from there we’ll see an upward growth pattern. The challenge is now with the unrest we have in the last week, that’s put a damper on things.”
– Anthony Nieves, chair of the Institute for Supply Management’s services survey committee, while commenting on a slight uptick in business activity in May.
In other news
Air freight rates start their descent as more capacity arrives amid demand slump
The air freight market is starting to see rates fall as capacity comes in – and demand subsides. (The Loadstar)
China cancels some U.S. farm shipments, maritime executives say
Orders, among them 23 cargoes of soybeans, are canceled as tensions rise between Washington and Beijing. (WSJ)
Weak demand pushing oil, gas toward ‘terminal decline’: report
Falling fossil fuel demand coupled with mounting risk for investors could slash the value of oil, gas and coal reserves by two-thirds, sending shock waves through the global economy. (Yahoo!)
Tesla going into software subscription service could become big business
Tesla has started to indicate that it is going to expand its software offering, including a subscription to its full self-driving package. (Electrek)
Coca-Cola, Mondelez trim SKUs as CPGs tackle pandemic stresses
Supply chains are reducing complexity to better operate in volatile market conditions. (Supply Chain Dive)
German automaker Volkswagen has invested $1 billion in self-driving technology startup Argo AI. The deal will also see Argo AI taking over Volkswagen’s autonomous vehicle unit – valued at $1.6 billion – along with over 200 employees who worked in the unit. The deal, which was signed last July, has finally been realized this week.
Ford Motor Company has a majority stake in Argo AI. Apart from the direct deal with Argo AI, Volkswagen will also buy $500 million in shares of Argo AI from Ford over three years. Volkswagen’s move is concurrent with the broader industry trend in which automakers are betting on self-driving and connected technology – increasingly considered the future of mobility.
Noticeably, the Volkswagen deal’s completion comes after Ford announced the postponement of its autonomous vehicle commercial services with Argo AI to 2022 due to the pandemic.
Hammer down everyone!